There were several highlights worth noting in the latest Flow Show report from BofA’s Michael Hartnett, first and foremost that despite hitting daily all time highs, US equities have experienced outflows on 8 of the last 10 weeks, with $3.3 billion redeemed in the last week, while US value stocks have suffered outflows on 9 of the past 10 weeks while small cap stocks have seen outflows in 8 of the past 9 weeks. Additionally, junk bonds have similarly seen outflows in 8 of the past 12 weeks. This has been offset by inflows in European equities (9 straight weeks), tech stocks (12 straight weeks) and Emerging Markets (10 straight weeks). Also of note, total bonds have had inflows on 21 of the last 22 weeks, while Investment Grade bonds have seen inflows for 22 consecutive weeks, and a total of $541 billion in the past five years.
Another interesting observation: contrary to reports of no retail participation in the rally and “money on the sidelines”, BofA finds its private client allocations to equities is approaching an all time highs, at 59.7%, while allocations to debt and cash are at, or just, shy of all time lows.
Finally, here is the breakdown of 2017’s cross asset winners and losers, broken down by category…
… and finally, here is BofA’s calculation of the world’s most overbought and oversold assets, based on their deviation from the 200 DMA.
For total assets, most overbought are:
- European Equities
- UK Equities
- EM Equities
- US Equities
- Pacific Rim ex-Japan
And most oversold:
- US Dollar
- Government Bonds
- Investment Grade Bonds
For the various other subclasses, see the table below.